Allow me to introduce you to my ERISA blog. ERISA was enacted by congress to reconcile a number of competing policy interests, but principally to mandate duties, procedures, and practices that would protect the assets of employee benefit plans from mismanagement and malfeasance. I've been working primarily in matters relating to the Employee Retirement Income Security Act of 1974, as amended, since 1995.
There are some particularly unfortunate aspects of the way ERISA was drafted and has come to be interpreted over the years. For example, the lack of a punitive remedy for bad faith denials of benefits by self-serving insurance companies has caused virtually every major health and disability insurer in the U.S. to adopt practices designed to repel contractually valid benefit claims, purely for profit. [Under state law, insurers frequently face punitive damages for bad faith denial of claims; under ERISA, those same insurers will never have to pay more than the insurance benefit they would have to pay if they honored their insurance contract. So they delay and obfuscate as long as possible in order to keep their money, and wear down their insureds] Another example is the Supreme Court's consistent interpretation of the phrase "other appropriate equitable relief" in ERISA section 502(a)(3) to mean "remedies that were available in British courts of equity." We continue to believe that a more appropriate interpretation of "equitable" in that connection is "fair," but we're not Supreme Court Justices, and we have to work with what they give us.
On the other hand, ERISA continues to create some incredibly powerful protections for employees: the ability to obtain the equivalent of class relief under 502(a)(2) without the necessity of a burdensome class action law suit; a claim regulation promulgated by the D.O.L. that mandates a set of practices and procedures for communicating with employees such that they can actually understand what their insurers are telling them; strict liability for self-dealing under ERISA section 406; and let's not forget ERISA's fiduciary duties generally: the highest duties known to the law. Indeed, the name of this blog derives from the Second Circuit's seminal 1982 decision in Donovan v. Bierwirth, holding that a fiduciary must act “with an eye single to the interests of the participants and beneficiaries.” 680 F.2d 263 (2nd Cir. 1982)(emphasis added).
This blog will explore current developments in ERISA jurisprudence, issues we face in our practice, and serve as a forum for discussion of same. I hope you come back for more.And if you find yourself struggling with your ERISA plan's administrator or insurer over your benefits (pension, disability, health, or otherwise), let us see if we can help.
Monday, June 16, 2008
Welcome to "an eye single"
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Labels: an eye single, bad-faith, equitable relief, ERISA, insurance, insurers, remedies
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